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POVERTY WORSENS. Putrid water from open sewerage reflects reflects squatter shanties in Pasay City on March 5, 2008. Soaring oil prices and the rising cost of living have driven nearly four million people in the Philippines back into poverty, according to a 2006 nationwide survey. AFP PHOTO/JAY DIRECTO


Poor Filipino families now number 4.7 million

By Michelle Remo, Michael Lim Ubac
Philippine Daily Inquirer
First Posted 03:26:00 03/06/2008

Filed Under: Economy, Business & Finance

MANILA, Philippines -- The fast-growing population and the failure of household incomes to rise as fast as commodity prices have resulted in more poor Filipino families, according to the 2006 Official Poverty Statistics report released Wednesday by the National Statistical Coordination Board (NSCB).

The report said 4.7 million families -- equivalent to 26.9 percent of the total number of Filipino families -- were poor in 2006, marking an increase from 4 million poor families in 2003.

It also said poverty incidence -- the proportion of those considered poor to the total number of families -- was at 26.9 percent in 2006, compared to 24.4 percent three years earlier.

??Poor? refers to those whose incomes fall below the threshold determined by the government, or those who cannot afford to provide in a sustained manner for their minimum basic needs for food, health, education, housing and other social amenities in life,? NSCB Secretary General Romulo Virola said in a press conference.

Said Augusto Santos, acting director general of the National Economic and Development Authority (NEDA): ?The failure to meet the most basic needs can be due to increasing prices and/or insufficient rise in personal income. Higher prices in 2004 to 2006 may have hindered access to both food and nonfood basic needs and, hence, pushed some individuals/families down the poverty line.?

Poverty incidence rose despite the average economic growth of 5.4 percent that the Philippines posted from 2004 to 2006.

From the statistics, it may be concluded that the benefits of a growing economy are not trickling down to the poor, Santos said.

But he said the economy performed much better after 2006, thus allowing the poor to feel its effects.


The NSCB said that in 2006, the average poverty line for a family of five was determined to be at P6,274 a month. This meant that a family of five earning less than that amount was considered poor.

It also said a family of five could live on the minimum wage of P9,100 a month in 2006 without being poor.

The poverty threshold rose from P5,129 in 2003 because of inflation, or the increase in consumer prices.

In 2006, as many as 1.9 million families -- from 1.7 million in 2003 -- were considered ?food-poor,? or those whose incomes fell below the minimum requirement for food expenditure set by the government, the NSCB said.

The food poverty incidence worsened from 10.2 percent of the total number of families in 2003 to 11 percent.

On an individual basis, 32.9 percent of the population, or 27.6 million Filipinos, were poor in 2006, the NSCB said. The figures showed a deterioration from the 30 percent and 23.8 million, respectively, recorded in 2003.

There were 12.2 million Filipinos -- equivalent to 14.6 percent of the population -- who were food poor in 2006, showing a deterioration from 10.8 million and 13.5 percent, respectively, in 2003.

Tawi-tawi, the southernmost province with 8 out of 10 families considered poor, was the poorest province in 2006, the NSCB said. On the other hand, Batanes, the northernmost province, registered zero poverty incidence.

Typhoons, VAT

NEDA?s Santos observed that in 2006, several areas in the country were devastated by Typhoons ?Milenyo? (international codename: Xangsane) and ?Reming? (Durian). The typhoons disrupted agriculture production, which many rural families depend on for their livelihood.

He said it was also in 2006 when the government increased the rate of the value-added tax from 10 to 12 percent in compliance with the Reformed Value-Added Tax Law of 2005, which also expanded the coverage of the tax to include electricity and oil starting in November 2005.

According to Santos, the higher prices of commodities were the undesirable result of the government?s need to improve its revenue collection. But he said the short-term effects of higher prices would be more than offset by the long-term effects of the government?s good financial condition.

Santos said that after instituting measures to improve revenue collection, the government adopted a policy of increased spending for infrastructure and social services.

This year, government spending for health services will be 70 percent higher than in the previous year, he said without giving exact figures.


On the other hand, Malacañang said poverty incidence actually fell during the Arroyo administration.

Cabinet Secretary Ricardo Saludo said poverty incidence dropped by 4.8 percentage points between 2000 and 2006, or from 27.2 percent to 22.4 percent of families for the six-year period.

Told later of a discrepancy between his figures and those of the NSCB, he said in a text message that he got his figures ?from the presentation of [Albay Gov. Joey] Salceda.?

Saludo also said self-rated poverty had gone down since 2000 and was now at its ?lowest in 20 years.?

He said he expected poverty incidence to fall in the family income and expenditure survey in 2009, with primary spending in the national budget for antipoverty projects and programs up by P281 billion in 2006-2008, or a fivefold increase in budgetary allocations since the period 2003-2005.

The survey results are reported once every three years.

?With the fiscal squeeze over, it?s social payback time,? Saludo said.

Santos likewise expressed optimism that poverty incidence would reflect a lower figure when the next Poverty Statistics report is released in 2009.

Reduction target

Dolores de Quiros-Castillo, assistant secretary of the National Anti-Poverty Commission (NAPC), said the government was targeting a reduction in poverty incidence of between 17 and 20 percent by 2010.

Castillo said the target, while ambitious, was achievable if the government would continue its policy of increasing spending for social services.

She said the NAPC had begun coordinating with local government units in implementing programs, such as livelihood training, to arrest poverty.

?With the growing need to promote conditions that assure better basic services for the poor, it has become necessary to determine -- with absolute precision -- where the poor are, why they are poor, and what service they require,? Castillo said at the same press conference.

Solid proof

In January, the private polling firm Social Weather Stations released survey results showing that self-rated poverty had gone down to 46 percent from 52 percent in the fourth quarter of 2007.

President Gloria Macapagal-Arroyo welcomed this as solid proof that her administration?s antipoverty and anti-hunger programs were on track.

The survey result was a significant improvement over the June 2004 survey results, then one of the lowest declines in self-rated poverty incidence since 1987.

SWS data showed that the last time self-rated poverty went below 50 percent under the Arroyo administration was in June 2007 at 47 percent, down from 49 percent in August 2005.

Payback time

The SWS also noted that self-rated poverty had been on a generally downward trend since mid-2006.

Ms Arroyo told her Cabinet in January that the challenge for her administration was to spread the payback of the economic turnaround to the people, especially the poorest of the poor.

?I am glad that the self-rated poverty incidence has gone down again, the lowest in 20 years,? she said then, adding that this was ?the result of the tough economic reforms we implemented, stability, and increased confidence of the international financial community in the country.?

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